Is your app appetite being satisfied?
It’s Friday afternoon and I’ve got one thing on my mind.
Whilst I eat my lunch, my mind wanders to what I’m going to eat for dinner (obviously), so I pull out my phone and browse the virtual aisles of a grocery app to plan my meals for the upcoming weekend.
Grocery retailers are still feeding me the same price led promotions as they have been for the last couple of years.
I’m starving for a better app.
But with 48% of consumers who have already shopped online in the past year it seems the changes in the industry are keeping some people happily fed.
In 2016 alone, the online UK food and grocery market share sat at £10.5bn and is predicted to grow to £17.6bn by 2021 [IGD].
“It’s been exciting to watch the online food delivery industry grow as quickly as it has and to see how brands have adapted their business model in increasingly creative, customer-grabbing ways. With high-profile competitors entering the UK market and strong contenders acquiring others, I fully expect the online market share to continue to rapidly grow throughout 2017.” said Ve Interactive’s Head of Digital, Tom Clark.
But even with app innovations on the rise, it’s clear that it’s no longer enough to just have a great product and a decent strategy.
When we take into account the astounding 25% of consumers who haven’t purchased groceries online and have no interest in doing so in the future it really makes us wonder what more can retailers do to pique consumers interests?
According to Mintel, 68% of consumers would like lower delivery prices, 56% want a lower/no minimum order, 51% want greater loyalty card rewards, 46% want a guarantee that fewer products are substituted and 53% of shoppers agreed it’s important to have the ability to have online grocery orders delivered on the same day.
Currently, the majority of retailers are offering delivery in one or two hour slots with prices changing depending on the time of day – evenings and weekends are typically more expensive – but a key theme of innovation in the online grocery market in 2016 and 2017 is the speed of delivery.
Sainsbury’s is trialling a new one-hour bicycle delivery service, Chop Chop, in London, while Tesco is following close behind with their one-hour delivery service trial, which began in February 2017, and Amazon offering Prime members one or two hour delivery through its partnership with Morrisons and its Amazon Prime Now service.
As said by Nick Carrol, Senior Retail Analysis at Mintel, “Online grocery is the quickest growing grocery channel, but equally the smallest. Once seen as simply a service to replicate the needs of a supermarket shop online, a number of new services came to market in 2016 that have the potential for online grocery to transcend this barrier and adequately serve the more fluid and frequent shopping behaviours seen in the wider market.”
But the race to innovation isn’t as close as it may seem.
With 35% of total online grocery sales, Tesco is leading by miles in online grocery market. That’s more than its two nearest rivals Sainsbury’s and Ocado combined!
This could be in part due to their new PayQuiq app, which after a successful trial, is being rolled out throughout Tesco stores in the UK.
The app allows users to store their credit or debit card and Clubcard details on your phone to quickly pay for your shopping and automatically collect Clubcard points.
Rival Sainbury’s, unsurprisingly, are testing their own version which is set to trial soon.
But is Sainsbury’s being ambitious enough with Amazon taking their app to a complete other level?
Their industry changing “just walk out technology” allows customers scan their phones upon entering the store and sensors around the store record items they pick up to charge them once they’ve left the store. So it won’t charge you for picking up that gooey sticky toffee pudding for lunch and putting it back after feeling slightly guilty. (You can always go back and get it when your co-worker’s aren’t around)
The modernisation of grocery shopping by creating a queue-less world truly pushes the boundaries of what we expect out of a grocery app. But how can retailers continue to drive innovation and push the boundaries even further?
Domino’s is a great example of creating something that is more than an app. It becomes embedded into the lives of their consumers and through doing this, they have become a digital-first brand that “enhances, enriches and positively participates in the culture of mealtimes” [Dominos].
Their app introduced whole meal solutions that included but didn’t rely on their value ‘pizza deals’.
Instead, their focus was on ‘midweek rescue’, ‘winter survival’, and ‘big night in’ to fit into a fixed calendar of new pizza releases, other products, services and communications around people, occasions and popular culture.
This allowed a partnership to grow with X Factor viewers who were given the ability to order directly from the show’s app on a Saturday night as well as allowing gamers to order from within the Xbox Live platform, becoming the first Xbox app to enable delivery of a physical product.
Where pizza lovers were found, Domino’s was there, but this wasn’t enough for the brand.
They created a mobile-first platform that allowed customers to not just customise their pizza, but to name it, brand it, tell the legendary story behind it, and make it famous within the Domino’s League of Legends.
The Pizza Legends value is 38% higher than a menu pizza with 44% repeat purchase rate due to customers engaging with the brand by ordering their friends’ pizzas, voting for their favourites and through the excitement of seeing their own creations in advertisements.
Domino’s became their customers and their customers became their brand.
Pizza lovers were drooling, and they had the memes to prove it.
And once again, Domino’s listened. They created a ‘loss for words’ campaign combined meme-inspired TV advertising with a custom Snapchat filter and branded GIFY channel which triggered 2.5 million GIF views and a Channel 4 parody.
Twelve consecutive quarters of double-digit growth and a 20% year-on-year uplift in net sales later, Domino’s mobile ordering platform is the their biggest sales channel.
This alone should be more than enough to inspire grocery retailers to up their app ante, but they’re still falling so far behind.
It’s about time grocery retailers make the attempt to immerse themselves into the wants and needs of their customers and provide a new way of shopping.
We’re screaming for it – okay, it’s mostly me doing the screaming, but I know you’re right behind me.
Most grocery retailers are missing out on the massive opportunity to give us the understanding and convenience we crave!
And without evolving, they’re only leaving more opportunity for retailers such as Tesco and Amazon to maintain their dominance and continue shaking up the game better than I shake it on the dancefloor (and I’m pretty good, so it’s kind of a big deal).
So, maybe our everyday grocery stores will never get up to scratch in terms of innovation but I guess I’ll just stick to my thin crust margherita pizza whilst I wait.